Tax office must provide information about competitors

A company whose services compete with the services of an association recognised as a non-profit organisation can, under certain conditions, demand information from the tax office on the tax rate at which the turnover generated by the association from corresponding activities has been taxed. This was decided by the 15th Senate of the Münster Fiscal Court in its ruling of 7 December 2010 (15 K 3614/07 U).

The plaintiff, who transports blood reserves, blood samples and organs on a commercial basis, had reason to believe that the association, which is recognised as a non-profit organisation and does similar things, only charges and pays tax on its transport services at the reduced VAT rate. The plaintiff saw this as a distortion of competition. In order to prepare a competitor's action because of this, in its opinion, incorrect taxation of the association, the plaintiff demanded information from the tax office on how the transport turnover of the association had been taxed in the years in dispute, 2004 and 2005.

The court upheld the action. A taxpayer has a right to information regarding the taxation of a competitor if it substantiates and credibly demonstrates two things: firstly, that it suffers concretely provable competitive disadvantages as a result of an incorrect taxation of a competitor that can be assumed on the basis of facts or at least cannot be ruled out with sufficient certainty; secondly, that it can file a competitor's action against the tax authority with prospects of success. Tax secrecy does not prevent this claim. In the case in dispute, it was obvious that the association's transport services had been taxed at the reduced rate. This was possibly incorrect. In any case, it could not be ruled out that the association had not provided its transport services within the framework of a special purpose business (§ 65 AO, § 12 para. 2 no. 8a UStG), as there had been a tax-damaging competitive situation between the association and the plaintiff. It was also understandable that the plaintiff would suffer competitive disadvantages by taxing the association at the reduced tax rate. Users of the transport services were essentially institutions not entitled to deduct input tax.

As a rule, the rights of a taxpayer are not violated by the fact that another taxpayer is taxed too low. However, this was different if the under-taxation violated a norm that was at least also intended to protect the interests of third parties. The provision of § 65 no. 3 of the German Fiscal Code (AO), which was possibly relevant in the case at hand, was intended to protect non-tax-favoured businesses - such as the plaintiff - from the fact that competitors, who were in principle tax-favoured due to their purpose, were also tax-favoured with regard to transactions carried out by them, which did not serve the purpose of fulfilling their purpose, which justified the tax concession.

The 15th Senate allowed the appeal to the Federal Fiscal Court.

Source: Press release of the Münster Fiscal Court


Goldberg Attorneys at Law

Attorney at Law Michael Ullrich, LL.M. (Information Law)

Specialist lawyer for information technology law (IT law)